January 9, 1988

LEAD: U.S. Gloom on Haiti Washington now appears powerless as its efforts to lead the military Government away from dictatorship seem to be exhausted. Page 2. Bush and Iran Affair Vice President Bush, in a campaign debate, was on the defensive over the Iran-contra affair. He is expected to be interviewed under oath about the affair on Monday.

LEAD: Israeli officials said today that dozens of Palestinians had been jailed in the last few days under a procedure allowing them to be held without trial for up to six months.

LEAD: A senior White House policy group has agreed in principle that the Government should back a private plan for construction of a small, inexpensive space station that would fly into orbit years ahead of NASA's multibillion-dollar space outpost, Federal officials said yesterday.

LEAD: The economy continued to create jobs at a rapid pace last month, the Labor Department reported today. The unemployment rate fell one-tenth of a percentage point, to 5.7 percent, the lowest level since mid-1979.

LEAD: Gov. Evan Mecham, already facing a possible recall from office, was indicted today by a state grand jury on six felony counts including perjury and concealing a $350,000 campaign loan.